Ethereum 2.0 – A real competitor to Bitcoin

Call it Eth2, Serenity or Ethereum 2.0, this is the long-anticipated upgrade to the Ethereum blockchain. Intended to boost the efficiency, speed and scalability of the Ethereum network, Eth2 will further enable its previous version to tackle hurdles in addition to increasing the count of transactions.

Ethereum 2.0 is designed to be launched in three phases:

  • ‘Phase 0’ – Beacon Chain Launch – Launched on 1 December 2020, this phase created the Beacon Chain. It is a proof of stake (PoS) blockchain that will act as a consensus hub and the central coordination of Ethereum 2.0.
  • ‘Phase 1’ – Introduction of Sharding – In this phase shard chains will be created. They then will be connected to the Beacon Chain.
  • ‘Phase 2’ – Launching of eWASM as the successor of EVM – This phase will implement state execution in the shard chains with the recent Eth1 chain anticipated becoming one of the shards of Eth2.

Why it’s happening?

There has been only one large-scale competitor to Bitcoin since long, which is Ethereum. Though Eth is more advanced than Bitcoin, it encounters some problems that must be overcome to dominate the market. And with this in their mind, developers are coming up with an upgrade of the underlying blockchain, Ethereum 2.0.

The main purpose of the advanced version is to boost transaction throughput for the network. As of now, about 15 transactions per second take place and it is expected to increase up to 10,000 transactions per second.

The plan is to increase throughput by dividing the workload into many blockchains that run in parallel. This is referred to as sharding. They then all share a common consensus proof of stake blockchain. It is done so that to maliciously tamper with any singular chain would cost the attacker far more than he/she can ever earn from an attack.

What are the changes, outcomes or results?

As compared to Ethereum 1.0, Eth2 has come up with some fundamental changes in its design and structure. The two major changes are “sharding” and “proof of stake”.

Leaving Proof-of-Work

One of the reasons that previous blockchain implementations suffered from performance issues was dependence on a processing-power-intensive process known as proof of work. This was done to validate and record transactions. The problem with proof of work is its inefficiency by design. To solve the problem, Ethereum 2.0 is going to transition its blockchain to a more efficient, proof-of-stake system.

Introducing Sharding

In order to improve Eth’s ability to scale and efficiency, Ethereum 2.0 will come up with a processing technique known as sharding. In the recent blockchain version, all data adds up to the chain and is verified by all participating nodes. This slows down the processing speed of the entire system, thereby decreasing throughput and increasing the transaction costs.

By adding sharding, Ethereum 2.0 can boost the efficiency of its resource usage in a big way. In the new system, data verification will be divided among sets of nodes and each will be responsible for verifying just the data it received. Eventually, it will lead to an increase in the overall capacity several times over.

Share & like

Related Posts

Leave a Reply